ServiceNow shares plunge on Armis deal speculation

Investing.com -- ServiceNow shares plunged more than 9% at the open on Monday after a report that the software group is in advanced talks to acquire cybersecurity firm Armis for up to $7 billion.

Bloomberg reported over the weekend that ServiceNow is nearing an agreement to buy Armis, though neither company has confirmed the talks.

In a note reacting to the news, Morgan Stanley highlighted the report, if accurate, would mark ServiceNow’s third acquisition proposal of more than $1 billion this year and its largest in 2025.

“This past weekend, a news outlet reported ServiceNow is in advanced talks to acquire Armis, a cyber exposure management platform provider for up to $7B,” Morgan Stanley said, adding that it has “no knowledge whether any such transaction might occur.”

Analyst Keith Weiss noted that operational technology, or OT, has been a key focus area for ServiceNow and that a potential deal “would further solidify its positioning in an increasingly important market” if announced.

The analyst believes Armis would provide “a scaled OT security solution that can bolster its existing $1B+ ACV Security and Risk businesses.”

However, he cautioned that the size of the transaction could weigh on sentiment. “If the report is correct, this would mark the company’s largest acquisition this year, so could further fuel investor concerns regarding durability of 20%+ growth,” the note said.

Armis, founded in 2015, provides cyber exposure management and attack surface protection across IT, OT and IoMT environments.

It is highlighted that the company generated more than $300 million in annual recurring revenue as of August 2025, with customers including “60% of the Fortune 10.”

Morgan Stanley added that, while unsubstantiated, such a deal could be a “negative read” for vulnerability management peers such as Tenable, Qualys and Rapid7, given Armis’ potential access to ServiceNow’s enterprise relationships and go-to-market platform.

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